Special Coverage

Hayward and NYRA in settlement dispute

Charles Hayward, the former chief executive officer of the New York Racing Association, reiterated in a statement Thursday that the NYRA board acted improperly when it fired him last May over allegations that he knew the association was applying a takeout rate to some superexotic wagers that was in violation of state law.

Hayward issued the statement after the Albany Times-Union reported that Hayward was seeking compensation from NYRA under the terms of his employment contract, which was terminated in May. In the statement, Hayward acknowledged that he was seeking a resolution to his contract after reiterating that he believed he was “terminated arbitrarily and without cause.”

“I had an employment agreement with NYRA and met all of my obligations,” the statement said. “I expect NYRA to do the same.”

In the statement, Hayward said that allegations made in a state report examining the takeout issue were “false” and that NYRA’s board “denied my request for an opportunity to challenge” the allegations “or set the record straight.”

NYRA officials said Thursday they would have no comment.

Hayward was fired on May 5, five days after the New York State Racing and Wagering Board released a report into the takeout matter, which was first raised in December 2011. Patrick Kehoe, NYRA’s general counsel, was also fired.

The New York State Racing and Wagering Board report was forwarded to the state Inspector General’s office, which said it would conduct its own investigation. Although several officials have said for months that the Inspector General had completed an investigation, representatives of the Inspector General’s office have not returned regular phone calls since December seeking the investigation’s findings. Another call on Thursday was not returned.

Hayward’s statement said that NYRA had had conducted an internal investigation. “To date, no report of either investigation has been issued to the public,” his statement said.

When Hayward was fired in May, NYRA’s board released a statement saying that Hayward and Kehoe “failed to perform their duties at a level required by the board.” At the time, NYRA was under pressure from Gov. Andrew Cuomo, who had called for the association to investigate a string of 21 deaths at Aqueduct’s inner-track meeting and had made public comments critical of the association’s management. The state’s Racing Franchise Oversight Board threatened to recommend that NYRA’s franchise to operate three tracks in New York be rescinded.

The racing and wagering board’s report included excerpts from e-mails written by Hayward detailing his frustration with the superexotic takeout rates, which were supposed to be reset to 25 percent in September 2010, following a legislatively mandated 1 percent hike for a two-year period. In one e-mail, Hayward said that he believed the takeout was too high but that he did not feel NYRA could lower them because of ongoing losses at NYRA and political pushback from the state’s OTBs, which benefited from the higher takeout by keeping a larger share of revenue from bets.

The takeout error was first discovered by state auditors who were conducting a review of the New York Thoroughbred Breeding and Development Fund. The 26 percent takeout had been applied for a 16-month period, costing bettors across the country approximately $8 million in reduced payouts, according to the racing and wagering board report.

When it was first discovered, NYRA lowered the takeout on the affected wagers to 24 percent. The association, in a statement, called the error “an unexpected oversight . . . due to the complexity of the takeout provisions of racing law.”

Hayward’s annual salary at NYRA was $475,000. A former publishing executive, he was hired by NYRA in 2004 following a stint as chief executive of Daily Racing Form .

Where is the Inspector General's report? This should have been the final word on the subject. Holding this report only lends to more suspicions as to what the Governor was really up to in this whole episode.

Bryan Langlois

More than 1 year ago

I could be wrong on this...but I believe the takeout error was not first discovered by a state auditor...but rather by a horseplayer who made Steve Crist aware of it and he forwarded it onto Hayward...leading to the whole thing of why Hayward felt he couldn't lower it just yet and all that followed. I wouldn't give the state any credit in this at all...if one of the bazillion oversight boards that were created to watch NYRA was doing their job...it would have been caught right away.

Rufus

More than 1 year ago

You would be correct Bryan. The bettor expressed frustration, and had documented to us on another website, the sunset clause involved in the exotic wagering, and the fact that the takeout rate hadn't been properly adjusted. He related that he had written to both, Steve Crist and Charles Hayward, and had not received a response back. A few bloggers suggested he contact the New York State Racing & Wagering Board. It was pretty ironic because the NYSR&WB and Sabini, who was in charge of overseeing NYRA at the time and should have known about "the glitch", didn't have a clue until they were informed by the knowledgeable bettor. Notice how vindictive Cuomo used his famously selective perception to focus only on NYRA and Hayward, not the NYSR&WB and Sabini; the same way Cuomo chose to do absolutely nothing regarding the politicians/cronies that were involved in the Aqueduct Entertainment Group bid-rigging casino scam.
"It has been said that politics is the second oldest profession. I have learned that it bears a striking resemblance to the first."
Ronald Reagan

Dennis

More than 1 year ago

You want your money Chucky? How about you pay wolves and me the money you robbed from us due to the excessive takeout.

Sal Carcia

More than 1 year ago

The NYRA and ADWs have made restitutions for this oversight.

wolves

More than 1 year ago

Sal, I haven't gotten a dime back from those criminals. I didn't pursue it because I wasn't sure when the robbery took place. I was mugged on Dec. 7, 2011. According to John, the fleecing took place until 12/18/11. I'll have to call around to see who is holding my money.

wolves

More than 1 year ago

does anyone know the dates for when the takeout was 1% too high? Is NYRA offering to pay claims to those who can prove they were robbed? I hit a pick 4 for 25k in Dec. 2011 and have the W2..seems NYRA shafted me out of $250!

John

More than 1 year ago

Mid-September 2010 to Dec. 18, 2011. I hit a taxable P4 in that window and I got a check from NYRA refunding the excessive takeout amount. You should have too, if your P4 was in that window.

wolves

More than 1 year ago

It was December 7th, 2011. I'm going to contact them. Thanks for the help.

Richard Land

More than 1 year ago

Hey Charlie:
You were at the helm when the SS NYRAtanic hit the iceberg. Forget "takeout gate": What about the catastrophic breakdowns last winter? What about the fact that you presided over a racing program which featured a leading trainer (Dutrow) and leading owner (Paragallo) who are now excluded from racing? Under your management, NYRA became to racing what the New York Jets have become in the NFL -- a laughingstock, a punch line. If you had been the CEO of a publicly held corporation, the shareholders would have escorted you out of the boardroom long before the takeout cover up did you in.
Don't go away mad Charlie, just go away.

Christopher Lally

More than 1 year ago

Yes, Richard Land, Throwing rocks at Charlie Hayward is great sport. Having fun? What about the breakdowns? What about Mr. Dutrow and Mr. Paragallo? Maybe to you NYRA is a punch line but not to me. Perhaps it's you Mr. Land who should just go away. Enjoy your racing elsewhere. The racing product in New York suffers not from the likes of Mr. Dutrow and Mr. Hayward but from haters who spew vile venom. Good luck.

Richard Land

More than 1 year ago

Vile venom? A lot of alliteration? I do not hate Charlie Hayward. I used to love New York racing. I am not a "hater". I do not enjoy throwing rocks. I do not even bother looking at the entries for inner dirt racing any more; I do not think I am alone here.
What makes me upset is that the crux of "Mr" Hayward's claim here is that he was fired without "cause". My contention is that even before the takeout fiasco, there were plenty of reasons for change at the top at NYRA.
Believe me, nothing would make me happier than to be here saying what a great job Charlie Hayward is doing, and how I am looking forward to going over to Aqueduct this weekend and betting on a quality product, but he didn't and I'm not.